Now that tax season is over, it is time to start preparing for next year. These simple steps can help you receive a refund next year and you reduce your taxes.
- Predict the future – using your last pay stub: It is possible to do a tax projection of your taxes for the full year. Review the withholding amount that is listed on your paycheck stub and make any necessary adjustments. A Jackson Hewitt tax preparer can help put together an estimated projection at any time throughout the year, or can assist with amending a prior year return.
- Keep an eye on tax-saving strategies: Common activities such as purchasing a new car or making home improvements may lead to tax benefits. For example, the Energy Tax Act offers tax incentives for energy-efficient car purchases or home repairs. If you need to replace a hot water heater, install a new a/c unit, re-insulate your home or put in new windows, or if you’re planning to buy a new car, making a “green” purchase and keeping the proper documentation can lead to savings on your tax return.
- Evaluate what you are saving and how: Look for ways to participate in tax-free savings opportunities. Many companies offer a 401(k) program, which is a helpful way to save and reduce your taxable income. The maximum contribution amount is $16,500. “A simple tax tip is to become involved with a 401(k) plan and to try to contribute the maximum amount,” says Steber. “If you’ve been unable to participate thus far this year, see if contributing or even increasing your contribution for the remainder of the year might work.” If you turn 50 this year, or are already 50 or older, you can increase your contribution by an additional $5,500.
Many Jackson Hewitt offices are open year round to help you with your tax questions and needs.